I just used Snagit's "cut out" to create a transparent section in a PNG image, saved it, and then opened in with both Acrobat and Photoshop Elements 9 (which I think does most everything, though not as much, in the same way as PS9). In both Adobe programs, the transparent section I had created with Snagit appeared as it should--i.e., transparent. So I think perhaps you are not making things transparent, as you think. The transparent part of an image should display in Snagit as a gray and white checkboard. I've attached a sample. Good luck.